The Breguet Legacy – Part 1 [2/6/03]

The Breguet Legacy

Part I

“When one has finished building one’s house, one suddenly realizes that in the process one has learned something that one really needed to know in the worst way – before one began.”

— Friedrich Nietzsche

In the more than five centuries of watchmaking history, there is one watchmaker whose renown exceeds all others, whose influence remains omnipresent. While we must credit John Harrison with what is likely the greatest historical significance to the science of horology, no where did the high art and craft of watch and clock making receive greater advancement than in the hands of Abraham-Louis Breguet. If Harrison is our Galileo, then Breguet is our Leonardo.

Unlike the work of Harrison which ended with his death in 1776, the legacy of AL Breguet’s watchmaking was handed down and continued by subsequent generations. The house of Breguet has operated continuously since 1775, excepting perhaps only the short period of AL Breguet’s self-exile during the Terror (1793-5). In the decades after his death in 1823, Breguet et Fils became more of an engineering firm than a watchmaking concern, as the scions of the Breguet line sought exploits in other, newer technologies. Due to their success, the small watchmaking element of the company was spun off in 1870, sold to the English watchmaker that headed the boutique watchmaking operation.

Under Edward Brown and his descendants, Breguet remained a Parisian boutique for the next century, producing only a few hundred watches per year. During the era of grande complication pocket watches and observatory competitions, it utilized the famed ateliers in the Valle de Joux just like the elite brands of Geneva and Saxony. As the age of wristwatches dawned, Breguet followed fellow Parisian Cartier into the new mode. The aesthetic of Breguet-branded pocket watches and wristwatches evolved with the times, and were rarely distinguishable from their contemporaries, other than for the unique pieces made-to-order for special clients.

On the threshold of the quartz revolution in 1970, the Brown family sold the Breguet boutique to the now infamous Chaumet brothers. These Parisian jewelers attempted to re-expand the Breguet brand, and revive the signature aesthetic which we now think of as the “Breguet look.” While it largely continued to rely on etablissage, Breguet SA also opened its own atelier in Le Brassus in 1976 as part of its expansion. Production was increased, but the company lost money every year. Alas, the Chaumets went bankrupt in 1987, and the Republic of France sold its patrimony to the international investment firm Investcorp.

Nouvelle Lemania and Valdar were also acquired a few years later (1991) and united into a “Groupe Horloger Breguet.” At the time Nouvelle Lemania only supplied Montres Breguet with 9% of its movements – just the high horology repeaters, tourbillons, etc., while the majority were provided by Jaeger-LeCoultre and Frederic Piguet. Nouvelle Lemania was itself losing money and this was generally deemed a poor acquisition by the industry. The Breguet atelier was transferred to L’Abbaye in 1994, as production expanded to nearly 5,000 watches a year (1995). Montres Breguet began to use Nouvelle Lemania’s lesser legacy movements as well, transferring watchmakers and additional watch production to Lemania beginning in 1997, thereby increasing its workforce nearly 50%.

By that time watch production was at a new high of 6,000 per annum, but the company was still losing money, and retailers were dumping watches far below their inflated list prices. After more than ten years of heavy investment and profitless growth, Investcorp finally extracted a profit from the Breguet Group when it was sold to the Swatch Group in 1999. There Montres Breguet would become steel to be forged, to spearhead Swatch’s planned conquest of the exclusive world of haute horlogerie, to become the Swatch Group’s crown jewel and the world leader of haut couture watchmaking. Or so they have said.

The real state of the union is otherwise: The forced growth of Chaumet-Investcorp’s post-boutique era of mass production had undermined the quality and credibility of the Breguet product and brand in many ways. Throughout the industry the long centuries of quiet etablissage were coming to a close as the new age of the manufacture was dawning: An age of the marketing of the ‘manufacture,’ and the display-back showcased in-house movement specially dressed for viewing. Of exclusive products which were creating a new sense of ‘value’ amongst collectors.

As this in-house obsession was taking hold, a large problem lay in the fact that Montres Breguet priced its watches substantially higher than those of these manufactures, which had put extensive capital investment in the manufacturing of their own movements. This is a large part of the reason why the high prices of these manufactures were and are considered justified by collectors, and why their unique products were considered especially desirable. To illustrate the point, the Breguet ref. 3130 is a semi-complicated dress watch featuring a moonphase, date subdial, and power reserve display. It is closely comparable to the Patek Philippe ref. 5054 which has all of the same features.

The 5054 is based on the much beloved in-house calibre 240 PS, while the 3130 is based on the elegant Frederic Piguet calibre 71, also used by Blancpain (and likely others). Granting there is more craft in the 3130′s dial, it is balanced against the more complex double-backed case construction of the 5054. The MSRP of the 5054 is a substantial $19,300, while up until this year the Breguet 3130 was priced at $31,500 – more than a 60% premium. I await any explanation that would have justified this price premium, keeping in mind that this comparison is against what was, even then, unquestionably the strongest brand in fine watchmaking.

This emerging concept of in-house value had negative impact throughout their collections as none of the base movements used by Montres Breguet were exclusive. Indeed its most prized haute horlogerie ebauches were often showcased to better effect and at lower prices by innumerable brands, including its prime competitors at rival groups, to smaller independent makers. Equally damaging to the Breguet brand image and its optimistic price point was the similar commonness of its entry level movements, the most accessible of which did not in truth really qualify for the appellation of ‘fine,’ much less ‘high-grade.”

Specifically only the Nouvelle Lemania calibres 387, 389, 2320, and the new 1050 are really at the level of quality that one would potentially associate with the Breguet name, and all but the last were as widely sold as ebauches, and thus are as common, as such expensive calibres could be. Profitable for Nouvelle Lemania, but ruinous for Montres Breguet. During the Investcorp years Breguet had also began to utilize the merely passable calibre 8815, and the calibre 1352 which I and some others feel is frankly inappropriate. For some time the latter clogged Breguet’s service channels with malfunctioning Type XX chronographs, soiling the Breguet name at the crucial entry level. It goes without argument that a Breguet Type 20 re-issue could only be appropriately fitted with the calibre 2320, but this would have elevated it to an elite, special product, not an entry-level one; in the midst of a market feeding frenzy of entry level sports watches.

Aside from the Type XX, Montres Breguet had attempted to enter the lucrative sports watch market with the Marine collection. In no way demonstrating any of the characteristics or qualities of Breguet’s Marine chronometer heritage (example shown right), the collection was essentially a series of overly fussy braceletted watches, lacking the elegance of its dress watches and the stolid clarity, presence, and performance envelope expected of sports watches. We conceed some admiration for the Cottier-style Hora Mundi worldtimer, which carries off an opulent elegance despite its derivation from the Marine line.

Prior to its adoption of the lesser Lemanias, Breguet was far more dependent upon Jaeger-LeCoultre and Frederic Piguet, extensively using Piguet calibres 71 and 21, and Jaeger-LeCoultre calibres 889 and 818. All but the last were fine movements of impeccable craft. Yet at the time, both manufactures were a part of the enemy camp: F. Piguet an adjunct to Blancpain which SMH was attempting to build into a major haute horlogerie player, and Jaeger-LeCoultre belonged to Mannessman’s LMH. Both served the market at large, and Montres Breguet was only one of a number of customers. Thus these movements too were widely available in the watches of other brands, and at much lower prices. Here especially the new values being established in the collector mindset played particularly in the favor of manufactures like Patek Philippe, Lange Uhren, and Jaeger-LeCoultre.

This, in sum, is what Swatch inherited when it purchased the Groupe Horloger Breguet. Many would argue that the strongest element of the purchase was the Lemania manufacture, which by that time was the primary Breguet manufactory, and the most important supplier of haute horlogerie and high grade chronograph ebauches to the market. Montres Breguet itself if anything, appeared to be the red-headed stepchild in a Group well represented in haute horlogerie by Blancpain.

However, despite years of investment, Blancpain had never gained the cache of the eld Great Three in the auction or collectors markets – undermined no doubt by its dubious history and the often mediocre quality of extant vintage Blancpains. Breguet had the history, the real history, and a legacy of watches in the vintage market only rivaled by auction darling Patek Philippe. What it lacked was credibility in the modern marketplace in the wake of Chaumet and Investcorp. As mechanical wristwatches are a traditional product marketed and sold on the perception of authenticity, it is the creation of this perception in the mind of the collector which has necessarily become priority one at Swatch and Montres Breguet.

Authenticity in the case of the Breguet brand is conceptually different than that of most other established brands, which are heirs – at least in name – to strong watchmaking dynasties. Breguet as a brand is really representative of a single man and of his unique vision. Without Abraham-Louis Breguet the watchmaking house is not of any particular historical significance, as most of its rather quiet history demonstrates. The potential authenticity of Montres Breguet products lies quite simply in a restoration of that personal vision, not through replicas per se, but in craftsmanship and design following the philosophy which he set forth, in continuing a tradition begun by the watches crafted in Paris during his lifetime. It is a philosophy of watchmaking better upheld by independent watchmaker http://www.watchmaking.com/daniels/>George Daniels than by the house of Breguet under any ownership in the last 150 years – including the Breguets themselves.

The task of restoring the Breguet brand has been personally taken up by horological Caesar Nicolas Hayek, the builder of the Swatch empire. While remaining chairman, Hayek resigned his position as president and CEO of the Swatch Group in June of 2002, evidently to make Montres Breguet his primary priority, where he now serves as Directeur Général. This is akin to a king abdicating his throne to personally captain a single company in his army, albeit an elite one. If one were to undertake the transformation of a boutique watchmaker to mass manufacturer today, one would no doubt approach it differently – something more akin to the recreation of A. Lange & Söhne. Hayek instead is faced with some three decades of brand mismanagement and a muddled legacy product line, both of which require extensive repair to achieve the lofty goals that have been set for Montres Breguet.

The loftiest goal stated publicly is to increase production from the present sub-10,000 pieces per year, to 25,000 pieces per year by 2010. This is comparable to the mechanical watch production of Patek Philippe, and Montres Breguet makes no quartz watches. By that point in time the house also intends to have opened 30 Breguet boutiques in major cities around the world, which will also sell exclusive Breguet branded luxury products like the new Breguet fountain pens, as well as jewelry. This would seem to indicate that Breguet will be as targeted at Richemont’s Cartier as much as at the haute horlogerie throne. Last, there has been hint of the coming a Breguet school of watchmaking. The average luxury watch consumer may never really learn who AL Breguet was, and may be more interested in the celebrity patrons of the past rather than in the great horologer, but the “Breguet” brand is one that they will no doubt know soon enough, assuming that the market can absorb those 25,000 watches per year.

The action taken thus far by Montres Breguet under Hayek’s captaincy have centered around the need to remove every significant AL Breguet and Breguet et Fils watch from the secondary market at any price, to make them the exclusive province of the new Montres Breguet owned museum at Place Vendome in Paris, and another museum to be opened in Geneva by the Swatch Group. This has limited the house’s ability to remove the abundance of cheap Chaumet and Investcorp era Breguets from the secondary market as well – legacy watches currently undercutting the price credibility of new Breguet wristwatches. In the short term Montres Breguet has elected to take another hit to this critical element of market perception by deeply cutting its prices across the board. The aforementioned ref. 3130 has had its price reduced to $22,700 – nearly a 28% reduction, bringing it more in line with the comparable 5054, though still likely considered at a premium for a non-manufacture product.

This will hopefully bolster long term price credibility, and reduce the deep discounting and dumping which was undermining its overall credibility. No doubt a prime motivator in creating Breguet boutiques around the globe is to limit the discounting which undercuts resale values – and there is little that most luxury watch buyers like more than high resale value.

The most significant step taken thus far by Swatch to uplift the image of Breguet brand watches is the termination of all sales of Nouvelle Lemania ebauches outside of the Group. This has sent shockwaves through an industry which was heavily dependent upon Lemania’s chronographs, tourbillons, and repeaters. Within the next year or two all remaining contracts will have been satisfied, and Lemania calibres will be Breguet calibres in truth. In some years time this may begin to undo some of damage done by years of unrestrained Lemania ebauche sales. A possible final stroke to divide Breguet from the perception of etablissage would be the renaming of Nouvelle Lemania, which on www.breguet.com is – as of this writing – referred to as “Manufacture Breguet.”

But while this begins to address some of the issues of movement exclusivity and the modern cult of the manufacture which many modern collectors are so fascinated with, we wonder in the midst of all of these grand plans and sweeping changes, has anything been done to improve the watches themselves? This is a question we will explore in Part II.